On 26 July 2018, the Slovenian Government approved the proposal of the Financial Instruments Market Act, as well as the amendments to the Act on Alternative Investment Fund Managers and the Law on Investment Funds and Management Companies, which are closely related in substance to the first law.

The main purpose of the Financial Instruments Market Act is to transpose the Markets in Financial Instruments Directive (MiFID II) into Slovene legislation. The proposal regulates, inter alia, the rights of investors, liabilities of investment firms and supervisory institutions. The detailed rules and procedures regarding the guarantee scheme for investors’ claims or the complete repayment of guaranteed claims by investors are laid down.

Key novelties transferred from the European legislation primarily entail the obligation to ensure the financial products are traded on regulated venues, transparency requirements for a larger range of financial instruments, transparency requirements that apply before and after trading in financial instruments (e.g. publication of information regarding the prices of financial instruments), requirements relating to algorithmic and high-frequency trading, and the establishment of controls in this regard, as well as increased powers of supervisory authorities and the unification of sanctions.

The Act also seeks to strengthen investor protection. Investment firms should act in accordance with the best interests of their clients when providing them with investment services. They should safeguard their clients’ assets or ensure the products they intend to launch are designed to meet the needs of final clients. Investors will have to be provided with increased information on products and services offered or sold to them, and the firms will have to ensure that staff remuneration and performance assessments are not organised in a way that goes against clients’ interests.

The Government will propose to the National Assembly that all three proposals of laws are discussed at the same session due to their substantive coherence and the need for simultaneous publication in the Official Gazette. In addition, the Government will propose a hearing through an urgent procedure, as on 19 July 2018, the European Commission issued a press release, announcing that it has referred Slovenia to the Court of Justice of the European Union for the failure to fully enact the MiFID II as well as its supplementing Directive (Delegated Directive (EU) 2017/593).

 

Source: Republic of Slovenia – Ministry of Finance